Accounting Policies of DQ Entertainment (International) Ltd. Company

Mar 31, 2016

1. Significant Accounting Policies

a) Basis for Preparation of Financial Statements:

These financial statements are prepared under the historical cost convention on accrual basis in accordance with accounting standards as prescribed under Section 133 of the Companies Act, 2013 (âActâ) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

b) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent liabilities as at the date of financial statements. Although these estimates are based upon managementâs best knowledge of current events and actions, actual results could differ from these estimates.

c) Fixed Assets:

Fixed assets are stated at cost, less accumulated depreciation / amortization and impairment if any. Costs include all expenses incurred to bring the assets to its present location and condition.

Capital work-in-progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed asset (including expenditure during construction) that are not yet ready for their intended use before the balance sheet date.

Capital work-in-progress also includes Direct or indirect expenses incurred on the Development of Projects in order to create Intellectual Property or Content, which are exploited on any form of media, as an intangible asset under development in accordance with AS 26 (intangible assets). In the event, the project is not scheduled for production within three years, or project is abandoned, the carrying value of the Development Rights would be expensed in the year in which such project is discontinued or abandoned.

d) Depreciation and Amortization:

Depreciation on fixed assets other than leasehold improvements is provided on straight-line method based on useful life as per schedule II of the Companies Act 2013 are as follows:

Hardware & Software (CGI*) 3 years

Hardware & Software(Others) 3 years

Generators 10 years

Office Equipment 5 years

Furniture & Fixtures 10 years

Vehicles 8 years

*Computer Generated Imagery

Individual assets costing less than Rs.5,000 are fully depreciated in the period of purchase. Where the aggregate actual cost of individual items of Plant and Machinery costing Rs.5, 000 or less constitutes more than 10% of the total actual cost of Plant and Machinery, depreciation is provided at normal rates stated above.

Leasehold improvements are amortized over the primary period of lease.

Distribution Rights are amortized over the period of the rights or ten years whichever is lower.

e) Investment:

Long-term investments are stated at cost, less provision for other than temporary diminution in value. Current investments are stated at the lower of cost and fair value.

(i) Production Revenue:

Revenue represents amounts receivable for production and is recognized in the profit and loss account in proportion to the stage of completion of the transaction at the date of the balance sheet. The stage of completion can be measured reliably and is assessed by reference to work completed as of the date of the balance sheet. The company uses the services performed to date as a percentage of total services to be performed as the method for determining the stage of completion. Where services are in progress and where the amounts invoiced exceed the revenue recognized, the excess is shown as advance from customers. Where the revenue recognized exceeds the invoiced amount, the amounts are classified as unbilled revenue.

The stage of completion for each episode is estimated by the management at the onset of the series by breaking each episode into specific activities and estimating the efforts required for the completion of each activity. Revenue is then allocated to each activity based on the proportion of efforts required to complete the activity in relation to the overall estimated efforts. Managementâs estimates of the efforts required in relation to the stage of completion, determined at the onset of the series, are revisited at the date of the balance sheet and any material deviations from the initial estimate are recognized in the profit and loss account. The companyâs services are performed by a determinable number of acts over the duration of the project and hence revenue is not recognized on a straight-line basis. Contract costs that are not probable of being recovered are recognized as an expense immediately.

(ii) Distribution Revenue:

Revenue from the licensing of distribution rights where there is an ongoing performance obligation is recognized on a straight line basis over the term of the licensing agreement and in the case of the license fee from co-production rights on the date declared by the licensee. Revenue from the licensing of distribution rights under a non-cancellable contract, which permits the licensee to freely exploit those rights and where the Company has no remaining obligations to perform, is recognized at the time of sale.

(iii) Training Revenue:

Training Revenue is recognized over the period of instruction.

No revenue is recognized if there are significant uncertainties regarding recovery of the consideration due.

(iv) Dividends and Interest income:

Dividends are recorded when the right to receive payment is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

(g) Foreign Currency Transactions:

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items not covered above, or on reporting such monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

(iv) Forward Exchange Contracts not intended for trading or speculation purposes. The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.

(h) Employee benefits

i) Post. employment benefit plans

Post. employment benefits are recognized as an expense in the Profit and Loss Account for the year in which the employee has rendered services.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the profit and loss account for the period in which they occur.

ii) Short-term employee benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service. These benefits include compensated absences such as paid annual leave.

iii) Long term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the balance sheet date.

(i) Public Issue related expenses

Public issue related expenses are recognized as an expense in the profit and loss account in the year in which the expenses are incurred.

(j) Taxation

i) Provision for Income Tax is made on the assessable income, at the applicable tax rates, in accordance with the provisions of the Income. tax Act, 1961. Income derived from the animation division and related services are exempt under section I0AA of the Income. tax Act, 1961 up to 31st March 2015. The Company has provided tax on its other taxable income earned during the year.

ii) Minimum Alternate Tax (MAT) paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax after the tax holiday period. Accordingly, MAT is recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably.

iii) Deferred tax expense or benefit is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize such assets. In other situations, deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

(k) Provision for retakes

Provisions for retakes are recognized wherever they are considered to be material. Retakes include creative changes to the final product delivered to the customer, performed on the specific request of the customer at the Companyâs own cost. Requests for retakes from customers are expected to be received by the Company within a period of three months from the final delivery.

(l ) Leases

Lease payments for assets taken on Operating Lease are recognized in the Profit and Loss Account over the lease term in accordance with the Accounting Standard 19 - Leases.

(m) Earnings per Share

The Company reports basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard 20 - EPS.

- Basic Earnings per Equity Share has been computed by dividing Net Profit for the year by the weighted average number of Equity Shares outstanding for the period.

- Diluted Earnings per Equity Share has been computed using the weighted average number of Equity Shares and dilutive potential Equity Shares outstanding during the period except where the results are anti dilutive.

(n) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is possible that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the Financial Statements.

(o) Impairment

The carrying amounts of the Companyâs assets, other than Unbilled Revenue and deferred tax assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists, the assetâs recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in the profit and loss account. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Impairment losses recognized in respect of cash-generating units are allocated to reduce the carrying amount of assets in the unit on a pro rata basis.

(p) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Mar 31, 2014

(a) Basis for preparation of Financial Statements:

The financial statements have been prepared under the historical cost
convention on accrual basis in accordance with Generally Accepted
Accounting Principles, Accounting Standards notified under section
211(3C) of the Companies Act, 1956 and the relevant provisions thereof.

(b) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and disclosures of contingent liabilities as at the date of
financial statements. Although these estimates are based upon
management''s best knowledge of current events and actions, actual
results could differ from these estimates.

(c) Fixed Assets:

Fixed assets are stated at cost, less accumulated depreciation /
amortization and impairment if any. Costs include all expenses incurred
to bring the assets to its present location and condition.

Capital work-in-progress comprises outstanding advances paid to acquire
fixed assets and the cost of fixed asset (including expenditure during
construction) that are not yet ready for their intended use before the
balance sheet date.

Capital work-in-progress also includes Direct or indirect expenses
incurred on the Development of Projects in order to create Intellectual
Property or Content, which are exploited on any form of media, as an
intangible asset under development in accordance with AS 26 (intangible
assets). In the event, the project is not scheduled for production
within three years, or project is abandoned, the carrying value of the
Development Rights would be expensed in the year in which such project
is discontinued or abandoned.

(d) Depreciation and Amortization:

Depreciation on fixed assets other than leasehold improvements is
provided on straight-line method at rates which are as follows:

Hardware & Software (CGI*) 30.00%
Hardware & Software (Others) 16.21%

Generators 16.21%

Office Equipment 10.00%

Furniture & Fixtures 10.00%

Vehicles 25.00%

*Computer Generated Imagery

Individual assets costing less than Rs.5,000 are fully depreciated in
the period of purchase. Where the aggregate actual cost of individual
items of Plant and Machinery costing Rs.5, 000 or less constitutes more
than 10% of the total actual cost of Plant and Machinery, depreciation
is provided at normal rates stated above.

Leasehold improvements are amortized over the primary period of lease.
Distribution Rights are amortized over the period of the rights or ten
years whichever is lower.

(e) Investment:

Long-term investments are stated at cost, less provision for other than
temporary diminution in value. Current investments are stated at the
lower of cost and fair value.

(f) Revenue Recognition

(i) Production Revenue :

Revenue represents amounts receivable for production and is recognised
in the profit and loss account in proportion to the stage of completion
of the transaction at the date of the balance sheet. The stage of
completion can be measured reliably and is assessed by reference to
work completed as of the date of the balance sheet. The company uses
the services performed to date as a percentage of total services to be
performed as the method for determining the stage of completion. Where
services are in progress and where the amounts invoiced exceed the
revenue recognised, the excess is shown as advance from customers.
Where the revenue recognized exceeds the invoiced amount, the amounts
are classified as unbilled revenue.

The stage of completion for each episode is estimated by the management
at the onset of the series by breaking each episode into specific
activities and estimating the efforts required for the completion of
each activity. Revenue is then allocated to each activity based on the
proportion of efforts required to complete the activity in relation to
the overall estimated efforts. Management''s estimates of the efforts
required in relation to the stage of completion, determined at the
onset of the series, are revisited at the date of the balance sheet and
any material deviations from the initial estimate are recognised in the
profit and loss account. The company''s services are performed by a
determinable number of acts over the duration of the project and hence
revenue is not recognised on a straight-line basis. Contract costs that
are not probable of being recovered are recognised as an expense
immediately.

(ii) Distribution Revenue:

Revenue from the licensing of distribution rights where there is an
ongoing performance obligation is recognized on a straight line basis
over the term of the licensing agreement and in the case of the license
fee from co- production rights on the date declared by the licensee.
Revenue from the licensing of distribution rights under a
non-cancellable contract, which permits the licensee to freely exploit
those rights and where the Company has no remaining obligations to
perform, is recognised at the time of sale.

(iii) Training Revenue:

Training Revenue is recognized over the period of instruction. No
revenue is recognised if there are significant uncertainties regarding
recovery of the consideration due.

(iv) Dividends and Interest income:

Dividends are recorded when the right to receive payment is
established. Interest income is recognized on time proportion basis
taking into account the amount outstanding and the rate applicable.

(g) Foreign Currency Transactions:

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items not
covered above, or on reporting such monetary items of company at rates
different from those at which they were initially recorded during the
year, or reported in previous financial statements, are recognized as
income or as expenses in the year in which they arise.

The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognised as income or as expense for the
year.

(h) Employee benefits

(i) Post-employment benefit plans

Post-employment benefits are recognized as an expense in the Profit and
Loss Account for the year in which the employee has rendered services.

For defined benefit schemes, the cost of providing benefits is
determined using the Projected Unit Credit Method, with actuarial
valuations being carried out at each balance sheet date. Actuarial
gains and losses are recognised in full in the profit and loss account
for the period in which they occur.

(ii) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees is recognised
during the period when the employee renders the service. These benefits
include compensated absences such as paid annual leave.

(iii) Long-term employee benefits

Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognized as a liability at the present value of
the defined benefit obligation at the balance sheet date.

(i) public Issue related expenses

Public issue related expenses are recognised as an expense in the
profit and loss account in the year in which the expenses are incurred.

(j) Taxation

(i) Provision for Income Tax is made on the assessable income, at the
applicable tax rates, in accordance with the provisions of the
Income-tax Act, 1961. Income derived from the animation division and
related services are exempt under section 10AA of the Income-tax Act,
1961 up to 31st March 2015. The Company has provided tax on its other
taxable income earned during the year.

(ii) Minimum Alternate Tax (MAT) paid in accordance to the tax laws,
which gives rise to future economic benefits in the form of adjustment
of future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax after
the tax holiday period. Accordingly, MAT is recognized as an asset in
the balance sheet when it is probable that the future economic benefit
associated with it will flow to the Company and the asset can be
measured reliably.

(iii) Deferred tax expense or benefit is recognised on timing
differences being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Deferred tax assets and liabilities are
measured using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses,
deferred tax assets are recognised only to the extent that there is
virtual certainty that sufficient taxable income will be available to
realise such assets. In other situations, deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available to realise these
assets.

(k) provision for retakes

Provisions for retakes are recognised wherever they are considered to
be material. Retakes include creative changes to the final product
delivered to the customer, performed on the specific request of the
customer at the Company''s own cost. Requests for retakes from customers
are expected to be received by the Company within a period of three
months from the final delivery.

(l) Leases

Lease payments for assets taken on Operating Lease are recognized in
the Profit and Loss Account over the lease term in accordance with the
Accounting Standard 19 - Leases.

(m) Earnings Per Share

The Company reports basic and diluted Earnings per Share (EPS) in
accordance with Accounting Standard 20-EPS.

* Basic Earnings per Equity Share has been computed by dividing Net
Profit for the year by the weighted average number of Equity Shares
outstanding for the period.

* Diluted Earnings per Equity Share has been computed using the
weighted average number of Equity Shares and dilutive potential Equity
Shares outstanding during the period except where the results are anti
dilutive.

(n) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is possible that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
Financial Statements.

(o) Impairment

The carrying amounts of the Company''s assets, other than Unbilled
Revenue and deferred tax assets are reviewed at each Balance Sheet date
to determine whether there is any indication of impairment. If any such
indication exists, the asset''s recoverable amount is estimated. An
impairment loss is recognized whenever the carrying amount of an asset
or its cash-generating unit exceeds its recoverable amount. Impairment
losses are recognized in the profit and loss account. A cash-generating
unit is the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other
assets or groups of assets. Impairment losses recognized in respect of
cash-generating units are allocated to reduce the carrying amount of
assets in the unit on a pro rata basis.

(p) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
of funds.

Mar 31, 2013

(A) Basis for Preparation of Financial statements:

The financial statements have been prepared under the historical cost
convention on accrual basis in accordance with Generally Accepted
Accounting Principles, Accounting Standards notified under section
211(3C) of the Companies Act, 1956 and the relevant provisions thereof.

(B) Use Of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and disclosures of contingent liabilities as at the date of
financial statements. Although these estimates are based upon
management''s best knowledge of current events and actions, actual
results could differ from these estimates.

(c) Fixed assets:

Fixed assets are stated at cost, less accumulated depreciation /
amortization and impairment if any. Costs include all expenses incurred
to bring the assets to its present location and condition.

Capital work-in-progress comprises outstanding advances paid to acquire
fixed assets and the cost of fixed asset (including expenditure during
construction) that are not yet ready for their intended use before the
balance sheet date.

Capital work-in-progress also includes Direct or indirect expenses
incurred on the Development of Projects in order to create Intellectual
Property or Content, which are exploited on any form of media, as an
intangible asset under development in accordance with AS 26 (intangible
assets). In the event, the project is not scheduled for production
within three years, or project is abandoned, the carrying value of the
Development Rights would be expensed in the year in which such project
is discontinued or abandoned.

(D) Depreciation And Amortization:

Depreciation on fixed assets other than leasehold improvements is
provided on straight-line method at rates which are as follows:

Hardware & Software (CGI*) 30.00%

Hardware & Software (Others) 16.21%

Generators 16.21%

Office Equipment 10.00%

Furniture & Fixtures 10.00%

Vehicles 25.00%

*Computer Generated Imagery

Individual assets costing less than Rs.5,000 are fully depreciated in
the period of purchase. Where the aggregate actual cost of individual
items of Plant and Machinery costing Rs.5, 000 or less constitutes more
than 10% of the total actual cost of Plant and Machinery, depreciation
is provided at normal rates stated above.

Leasehold improvements are amortized over the primary period of lease.

Distribution Rights are amortized over the period of the rights or ten
years whichever is lower.

(E) Investment:

Long-term investments are stated at cost, less provision for other than
temporary diminution in value. Current investments are stated at the
lower of cost and fair value.

(F) Revenue Recognition:

(i) Production Revenue :

Revenue represents amounts receivable for production and is recognised
in the profit and loss account in proportion to the stage of completion
of the transaction at the date of the balance sheet. The stage of
completion can be measured reliably and is assessed by reference to
work completed as of the date of the balance sheet. The company uses
the services performed to date as a percentage of total services to be
performed as the method for determining the stage of completion. Where
services are in progress and where the amounts invoiced exceed the
revenue recognised, the excess is shown as advance from customers.
Where the revenue recognized exceeds the invoiced amount, the amounts
are classified as unbilled revenue.

The stage of completion for each episode is estimated by the management
at the onset of the series by breaking each episode into specific
activities and estimating the efforts required for the completion of
each activity. Revenue is then allocated to each activity based on the
proportion of efforts required to complete the activity in relation to
the overall estimated efforts. Management''s estimates of the efforts
required in relation to the stage of completion, determined at the
onset of the series, are revisited at the date of the balance sheet and
any material deviations from the initial estimate are recognised in the
profit and loss account. The company''s services are performed by a
determinable number of acts over the duration of the project and hence
revenue is not recognised on a straight-line basis. Contract costs that
are not probable of being recovered are recognised as an expense
immediately.

(ii) Distribution Revenue:

Revenue from the licensing of distribution rights where there is an
ongoing performance obligation is recognized on a straight line basis
over the term of the licensing agreement and in the case of the license
fee from co-production rights on the date declared by the licensee.
Revenue from the licensing of distribution rights under a
non-cancellable contract, which permits the licensee to freely exploit
those rights and where the Company has no remaining obligations to
perform, is recognised at the time of sale.

(iii) Training Revenue:

Training Revenue is recognized over the period of instruction.

No revenue is recognised if there are significant uncertainties
regarding recovery of the consideration due.

(iv) Dividends and Interest income:

Dividends are recorded when the right to receive payment is
established. Interest income is recognized on time proportion basis
taking into account the amount outstanding and the rate applicable.

(G) Foreign Currency Transactions:

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items not
covered above, or on reporting such monetary items of company at rates
different from those at which they were initially recorded during the
year, or reported in previous financial statements, are recognized as
income or as expenses in the year in which they arise.

(iv) Forward Exchange

These contracts not intended for trading or speculation purposes. The
premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognised as income or as expense for the
year.

(H) Employee Benefits

(i) Post-employment benefit plans

Post-employment benefits are recognized as an expense in the Profit and
Loss Account for the year in which the employee has rendered services.

For defined benefit schemes, the cost of providing benefits is
determined using the Projected Unit Credit Method, with actuarial
valuations being carried out at each balance sheet date. Actuarial
gains and losses are recognised in full in the profit and loss account
for the period in which they occur.

(ii) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees is recognised
during the period when the employee renders the service. These benefits
include compensated absences such as paid annual leave.

(iii) Long-term employee benefits

Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognized as a liability at the present value of
the defined benefit obligation at the balance sheet date.

(I) Public Issue Related Expenses

Public issue related expenses are recognised as an expense in the
profit and loss account in the year in which the expenses are incurred.

(J) Taxation

(i) Provision for Income Tax is made on the assessable income, at the
applicable tax rates, in accordance with the provisions of the
Income-tax Act, 1961. Income derived from the animation division and
related services are exempt under section 10AA of the Income-tax Act,
1961 up to 31st March 2015. The Company has provided tax on its other
taxable income earned during the year.

Minimum Alternate Tax (MAT) paid in accordance to the tax laws, which
gives rise to future economic benefits in the form of adjustment of
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax after
the tax holiday period. Accordingly, MAT is recognized as an asset in
the balance sheet when it is probable that the future economic benefit
associated with it will flow to the Company and the asset can be
measured reliably.

(iii) Deferred tax expense or benefit is recognised on timing
differences being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Deferred tax assets and liabilities are
measured using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses,
deferred tax assets are recognised only to the extent that there is
virtual certainty that sufficient taxable income will be available to
realise such assets. In other situations, deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available to realise these
assets.

(K) Provision For Retakes

Provisions for retakes are recognised wherever they are considered to
be material. Retakes include creative changes to the final product
delivered to the customer, performed on the specific request of the
customer at the Company''s own cost. Requests for retakes from customers
are expected to be received by the Company within a period of three
months from the final delivery.

(L) Leases

Lease payments for assets taken on Operating Lease are recognized in
the Profit and Loss Account over the lease term in accordance with the
Accounting Standard 19 Â Leases.

(M) Earnings Per Share

The Company reports basic and diluted Earnings per Share (EPS) in
accordance with Accounting Standard 20 Â EPS.

- Basic Earnings per Equity Share has been computed by dividing Net
Profit for the year by the weighted average number of Equity Shares
outstanding for the period.

- Diluted Earnings per Equity Share has been computed using the
weighted average number of Equity Shares and dilutive potential Equity
Shares outstanding during the period except where the results are anti
dilutive.

(N) Provisions, Contingent Liabilities And Contingent Assets

Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is possible that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
Financial Statements.

(O) Impairment

The carrying amounts of the Company''s assets, other than Unbilled
Revenue and deferred tax assets are reviewed at each Balance Sheet date
to determine whether there is any indication of impairment. If any such
indication exists, the asset''s recoverable amount is estimated. An
impairment loss is recognized whenever the carrying amount of an asset
or its cash-generating unit exceeds its recoverable amount. Impairment
losses are recognized in the profit and loss account. A cash-generating
unit is the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other
assets or groups of assets. Impairment losses recognized in respect of
cash-generating units are allocated to reduce the carrying amount of
assets in the unit on a pro rata basis.

(P) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
of funds.

Mar 31, 2012

A) Basis for Preparation of Financial Statements:

The financial statements have been prepared under the historical cost
convention on accrual basis in accordance with Generally Accepted
Accounting Principles, Accounting Standards notified under section
2II(3C) of the Companies Act, I956 and the relevant provisions thereof.

b) use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and disclosures of contingent liabilities as at the date of
financial statements. Although these estimates are based upon
management's best knowledge of current events and actions, actual
results could differ from these estimates.

c) Fixed Assets:

Fixed assets are stated at cost, less accumulated depreciation /
amortization and impairment if any. Costs include all expenses incurred
to bring the assets to its present location and condition.

Capital work-in-progress comprises outstanding advances paid to acquire
fixed assets and the cost of fixed asset (including expenditure during
construction) that are not yet ready for their intended use before the
balance sheet date.

Capital work-in-progress also includes Direct or indirect expenses
incurred on the Development of Projects in order to create Intellectual
Property or Content, which are exploited on any form of media, as an
intangible asset under development in accordance with AS 26 (intangible
assets). In the event, the project is not scheduled for production
within three years, or project is abandoned, the carrying value of the
Development Rights would be expensed in the year in which such project
is discontinued or abandoned.

d) Depreciation and Amortization:

Depreciation on fixed assets other than leasehold improvements is
provided on straight-line method at rates which are as follows:

Hardware & Software (CGI*) 30.00%

Hardware & Software (Others) I6.2I%

Generators 16.21%

Office Equipment 10.00%

Furniture & Fixtures I0.00%

Vehicles 25.00%

*Computer Generated Imagery

Individual assets costing less than Rs.5,000 are fully depreciated in
the period of purchase. Where the aggregate actual cost of individual
items of Plant and Machinery costing Rs.5, 000 or less constitutes more
than I0% of the total actual cost of Plant and Machinery, depreciation
is provided at normal rates stated above.

Leasehold improvements are amortized over the primary period of lease.

Distribution Rights are amortized over the period of the rights or ten
years whichever is lower.

e) Investment:

Long-term investments are stated at cost, less provision for other than
temporary diminution in value. Current investments are stated at the
lower of cost and fair value.

f) Revenue Recognition:

(i) Production Revenue:

Revenue represents amounts receivable for production and is recognised
in the profit and loss account in proportion to the stage of completion
of the transaction at the date of the balance sheet. The stage of
completion can be measured reliably and is assessed by reference to
work completed as of the date of the balance sheet. The company uses
the services performed to date as a percentage of total services to be
performed as the method for determining the stage of completion. Where
services are in progress and where the amounts invoiced exceed the
revenue recognised, the excess is shown as advance from customers.
Where the revenue recognized exceeds the invoiced amount, the amounts
are classified as unbilled revenue.

The stage of completion for each episode is estimated by the management
at the onset of the series by breaking each episode into specific
activities and estimating the efforts required for the completion of
each activity. Revenue is then allocated to each activity based on the
proportion of efforts required to complete the activity in relation to
the overall estimated efforts. Management's estimates of the efforts
required in relation to the stage of completion, determined at the
onset of the series, are revisited at the date of the balance sheet and
any material deviations from the initial estimate are recognised in the
profit and loss account. The company's services are performed by a
determinable number of acts over the duration of the project and hence
revenue is not recognised on a straight-line basis. Contract costs that
are not probable of being recovered are recognised as an expense
immediately.

(ii) Distribution Revenue:

Revenue from the licensing of distribution rights where there is an
ongoing performance obligation is recognized on a straight line basis
over the term of the licensing agreement and in the case of the license
fee from co-production rights on the date declared by the licensee.
Revenue from the licensing of distribution rights under a
non-cancellable contract, which permits the licensee to freely exploit
those rights and where the Company has no remaining obligations to
perform, is recognised at the time of sale.

(iii) Training Revenue:

Training Revenue is recognized over the period of instruction.

No revenue is recognised if there are significant uncertainties
regarding recovery of the consideration due.

(iv) Dividends and Interest income:

Dividends are recorded when the right to receive payment is
established. Interest income is recognized on time proportion basis
taking into account the amount outstanding and the rate applicable.

(g) Foreign Currency Transactions:

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items not
covered above, or on reporting such monetary items of company at rates
different from those at which they were initially recorded during the
year, or reported in previous financial statements, are recognized as
income or as expenses in the year in which they arise.

(iv) Forward Exchange Contracts not intended for trading or speculation
purposes. The premium or discount arising at the inception of forward
exchange contracts is amortised as expense or income over the life of
the contract. Exchange differences on such contracts are recognised in
the statement of profit and loss in the year in which the exchange
rates change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognised as income or as expense for the
year.

(h) Employee benefits

i) Post-employment benefit plans

Post-employment benefits are recognized as an expense in the Profit and
Loss Account for the year in which the employee has rendered services.

For defined benefit schemes, the cost of providing benefits is
determined using the Projected Unit Credit Method, with actuarial
valuations being carried out at each balance sheet date. Actuarial
gains and losses are recognised in full in the profit and loss account
for the period in which they occur.

ii) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees is recognised
during the period when the employee renders the service. These benefits
include compensated absences such as paid annual leave.

iii) Long-term employee benefits

Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognized as a liability at the present value of
the defined benefit obligation at the balance sheet date.

(i) Public Issue related expenses

Public issue related expenses are recognised as an expense in the
profit and loss account in the year in which the expenses are incurred.

(j) Taxation

i) Provision for Income Tax is made on the assessable income, at the
applicable tax rates, in accordance with the provisions of the
Income-tax Act, I96I. Income derived from the animation division and
related services are exempt under section I0AA of the Income-tax Act,
I96I up to 3Ist March 20II. The Company has provided tax on its other
taxable income earned during the year.

ii) Minimum Alternate Tax (MAT) paid in accordance to the tax laws,
which gives rise to future economic benefits in the form of adjustment
of future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax after
the tax holiday period. Accordingly, MAT is recognized as an asset in
the balance sheet when it is probable that the future economic benefit
associated with it will flow to the Company and the asset can be
measured reliably.

iii) Deferred tax expense or benefit is recognised on timing
differences being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Deferred tax assets and liabilities are
measured using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses,
deferred tax assets are recognised only to the extent that there is
virtual certainty that sufficient taxable income will be available to
realise such assets. In other situations, deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available to realise these
assets.

(k) Provision for retakes

Provisions for retakes are recognised wherever they are considered to
be material. Retakes include creative changes to the final product
delivered to the customer, performed on the specific request of the
customer at the Company's own cost. Requests for retakes from
customers are expected to be received by the Company within a period of
three months from the final delivery.

(l ) Leases

Lease payments for assets taken on Operating Lease are recognized in
the Profit and Loss Account over the lease term in accordance with the
Accounting Standard I9 - Leases.

(m) Earnings per Share

The Company reports basic and diluted Earnings per Share (EPS) in
accordance with Accounting Standard 20 - EPS.

- Basic Earnings per Equity Share has been computed by dividing Net
Profit for the year by the weighted average number of Equity Shares
outstanding for the period.

- Diluted Earnings per Equity Share has been computed using the
weighted average number of Equity Shares and dilutive potential Equity
Shares outstanding during the period except where the results are anti
dilutive.

(n) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is possible that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
Financial Statements.

(o) Impairment

The carrying amounts of the Company's assets, other than Unbilled
Revenue and deferred tax assets are reviewed at each Balance Sheet date
to determine whether there is any indication of impairment. If any such
indication exists, the asset's recoverable amount is estimated. An
impairment loss is recognized whenever the carrying amount of an asset
or its cash-generating unit exceeds its recoverable amount. Impairment
losses are recognized in the profit and loss account. A cash-generating
unit is the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other
assets or groups of assets. Impairment losses recognized in respect of
cash-generating units are allocated to reduce the carrying amount of
assets in the unit on a pro rata basis.

(p) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
of funds.

Mar 31, 2011

A) basis for Preparation of financial statements:

The financial statements have been prepared under the historical cost
convention on accrual basis in accordance with Generally Accepted
Accounting Principles, Accounting Standards notified under section
211(3C) of the Companies Act, 1956 and the relevant provisions thereof.

b) use of estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and disclosures of contingent liabilities as at the date of
financial statements. Although these estimates are based upon
management's best knowledge of current events and actions, actual
results could differ from these estimates.

c) fixed assets:

Fixed assets are stated at cost, less accumulated depreciation /
amortization and impairment if any. Costs include all expenses incurred
to bring the assets to its present location and condition.

Capital work-in-progress comprises outstanding advances paid to acquire
fixed assets and the cost of fixed asset (including expenditure during
construction) that are not yet ready for their intended use before the
balance sheet date.

Capital work-in-progress also includes Direct or indirect expenses
incurred on the Development of Projects in order to create Intellectual
Property or Content, which are exploited on any form of media, as an
intangible asset under development in accordance with AS 26 (intangible
assets). In the event, the project is not scheduled for production
within three years, or project is abandoned, the carrying value of the
Development Rights would be expensed in the year in which such project
is discontinued or abandoned.

d) depreciation and amortization:

Depreciation on fixed assets other than leasehold improvements is
provided on straight-line method at rates which are as follows:

Hardware & Software (CGI*) 30.00%

Hardware & Software (Others) 16.21%

Generators 16.21%

Office Equipment 10.00%

Furniture & Fixtures 10.00%

Vehicles 25.00%

*Computer Generated Imagery

Individual assets costing less than Rs.5,000 are fully depreciated in
the period of purchase. Where the aggregate actual cost of individual
items of Plant and Machinery costing Rs.5,000 or less constitutes more
than 10% of the total actual cost of Plant and Machinery, depreciation
is provided at normal rates stated above.

Leasehold improvements are amortized over the primary period of lease.

Distribution Rights are amortized over the period of the rights or ten
years whichever is lower.

e) Investment:

Long-term investments are stated at cost, less provision for other than
temporary diminution in value. Current investments are stated at the
lower of cost and fair value.

f) Revenue Recognition (i) Production Revenue :

Revenue represents amounts receivable for production and is recognised
in the profit and loss account in proportion to the stage of completion
of the transaction at the date of the balance sheet. The stage of
completion can be measured reliably and is assessed by reference to
work completed as of the date of the balance sheet. The company uses
the services performed to date as a percentage of total services to be
performed as the method for determining the stage of completion. Where
services are in progress and where the amounts invoiced exceed the
revenue recognised, the excess is shown as advance from customers.

Where the revenue recognized exceeds the invoiced amount, the amounts
are classified as unbilled revenue.

The stage of completion for each episode is estimated by the management
at the onset of the series by breaking each episode into specific
activities and estimating the efforts required for the completion of
each activity. Revenue is then allocated to each activity based on the
proportion of efforts required to complete the activity in relation to
the overall estimated efforts. Management's estimates of the efforts
required in relation to the stage of completion, determined at the
onset of the series, are revisited at the date of the balance sheet and
any material deviations from the initial estimate are recognised in the
profit and loss account. The company's services are performed by a
determinable number of acts over the duration of the project and hence
revenue is not recognised on a straight-line basis. Contract costs that
are not probable of being recovered are recognised as an expense
immediately.

(ii) Distribution Revenue:

Revenue from the licensing of distribution rights where there is an
ongoing performance obligation is recognised on a straight line basis
over the term of the licensing agreement and in the case of the license
fee from co-production rights on the date declared by the licensee.
Revenue from the licensing of distribution rights under a
non-cancellable contract, which permits the licensee to freely exploit
those rights and where the Company has no remaining obligations to
perform, is recognised at the time of sale.

(iii) Training Revenue :

Training Revenue is recognized over the period of instruction.

No revenue is recognised if there are significant uncertainties
regarding recovery of the consideration due.

(iv) Dividends and Interest income:

Dividends are recorded when the right to receive payment is
established. Interest income is recognised on time proportion basis
taking into account the amount outstanding and the rate applicable.

g) foreign Currency Transactions:

Foreign Currency Transactions (FCT) and Forward Exchange Contracts
(FEC) used to hedge FCT (including firm commitments and forecast
transactions) are initially recognized on the spot rate on the date of
the transaction / Contract.

Monetary assets and liabilities relating to FCT and FEC remaining
unsettled at the end of the year are translated at the exchange rate
prevailing as on the date of balance sheet.

The difference in translation and realized gains and losses on Foreign
Exchange Transactions (including option Contracts) are recognized in
Profit and Loss Account. Further, in respect of transactions covered by
FEC, the difference between contract rate and spot rate on the date of
the transaction is charged to Profit and Loss Account over the period
of the contract.

h) employee benefits

i) Post-employment benefit plans

Post-employment benefits are recognised as an expense in the Profit and
Loss Account for the year in which the employee has rendered services.

For defined benefit schemes, the cost of providing benefits is
determined using the Projected Unit Credit Method, with actuarial
valuations being carried out at each balance sheet date. Actuarial
gains and losses are recognised in full in the profit and loss account
for the period in which they occur.

ii) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees is recognised
during the period when the employee renders the service. These benefits
include compensated absences such as paid annual leave.

iii) Long-term employee benefits

Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognized as a liability at the present value of
the defined benefit obligation at the balance sheet date.

i) Public Issue related expenses

Public issue related expenses are recognised as an expense in the
profit and loss account in the year in which the expenses are incurred.

j) Taxation

i) Provision for Income Tax is made on the assessable income, at the
applicable tax rates, in accordance with the provisions of the
Income-tax Act, 1961. Income derived from the animation division and
related services are exempt under section 10A of the Income-tax Act,
1961 upto 31st March 2011. The Company has provided tax on its other
taxable income earned during the year.

ii) Minimum Alternate Tax (MAT) paid in accordance to the tax laws,
which gives rise to future economic benefits in the form of adjustment
of future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax after
the tax holiday period. Accordingly, MAT is recognized as an asset in
the balance sheet when it is probable that the future economic benefit
associated with it will flow to the Company and the asset can be
measured reliably.

iii) Deferred tax expense or benefit is recognised on timing
differences being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Deferred tax assets and liabilities are
measured using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses,
deferred tax assets are recognised only to the extent that there is
virtual certainty that sufficient taxable income will be available to
realise such assets. In other situations, deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available to realise these
assets.

k) Provision for retakes

Provisions for retakes are recognised wherever they are considered to
be material. Retakes include creative changes to the final product
delivered to the customer, performed on the specific request of the
customer at the Company's own cost. Requests for retakes from customers
are expected to be received by the Company within a period of three
months from the final delivery.

l) Leases

Lease payments for assets taken on Operating Lease are recognized in
the Profit and Loss Account over the lease term in accordance with the
Accounting Standard 19 Ã Leases.

m) earnings Per share

The Company reports basic and diluted Earnings per Share (EPS) in
accordance with Accounting Standard 20 Ã EPS.

- Basic Earnings per Equity Share has been computed by dividing Net
Profit for the year by the weighted average number of Equity Shares
outstanding for the period.

- Diluted Earnings per Equity Share has been computed using the
Weighted average number of Equity Shares and dilutive potential Equity
Shares outstanding during the period except where the results are anti
dilutive.

n) Provisions, Contingent Liabilities and Contingent assets

Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is possible that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
Financial Statements.

o) Impairment

The carrying amounts of the Company's assets, other than Unbilled
Revenue and deferred tax assets, are reviewed at each Balance Sheet
date to determine whether there is any indication of impairment. If any
such indication exists, the asset's recoverable amount is estimated. An
impairment loss is recognized whenever the carrying amount of an asset
or its cash-generating unit exceeds its recoverable amount. Impairment
losses are recognized in the profit and loss account. A cash-generating
unit is the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other
assets or groups of assets. Impairment losses recognized in respect of
cash-generating units are allocated to reduce the carrying amount of
assets in the unit on a pro rata basis.

Mar 31, 2010

A. Basis for Preparation of Financial Statements:

The financial statements have been prepared under the historical cost
convention on an accrual basis of accounting in accordance with
Generally Accepted Accounting Principles, Accounting Standards notified
under section 21 I (3C) of the Companies Act, 1956 and the relevant
provisions thereof.

b. Fixed Assets:

Fixed Assets are valued at cost inclusive of freight, installation
cost, finance cost, duties and taxes and other incidental expenses
incurred during the construction / installation stage. Fixed Assets
include expenditure incurred on creation of infrastructure facilities
at work premises.

Distribution rights represent the cost incurred on acquisition of
animation contents for exploitation.

Capital work-in-progress comprises outstanding advances paid to acquire
fixed assets and the cost of fixed asset (including expenditure during
construction) that are not yet ready for their intended use before the
balance sheet date.

Direct or indirect expenses incurred on the Development of Projects in
order to create Intellectual Property or Content, which are exploited
on any form of media are capitalized as an intangible asset under
development in accordance with AS 26 (intangible assets). In the event,
the project is not scheduled for production within three years, or
project is abandoned, the carrying value of the Development Rights
would be expensed in the year in which such project is discontinued or
abandoned. "Computer Generated Imagery

Individual assets costing less than Rs.5,000 are fully depreciated in
the period of purchase. Where the aggregate actual cost of individual
items of Plant and Machinery costing Rs.5,000 or less constitutes more
than 10% of the total actual cost of Plant and Machinery, depreciation
is provided at normal rates stated above.

Leasehold improvements are amortized over the primary period of lease.

Cost of Distribution Rights is amortized over the period of the right
including extended period or ten years whichever is lower.

d. Investment:

Long-term investments are stated at cost, less provision for other than
temporary diminution in value. Current investment comprising
investments in mutual funds are stated at the lower of cost and fair
value.

e. Licensing Rights

In respect of Licensing Rights acquired against a specific sale
contract, the costs are charged off as Production Costs.

f. Revenue Recognition (i) Production Revenue :

Service revenue from fixed-price contracts is recognised using the
Proportionate Completion Method. Provisions for estimated losses on
uncompleted contracts are made in the period in which such losses are
determined.

"Unbilled Revenue" represents services provided to the customers till
the balance sheet date, which are billed subsequent to period-end. All
such amounts are anticipated to be realised in the following period.

(ii) Distribution Revenue :

Revenue from the licensing of distribution rights (including
withholding tax) is recognised on a straight line basis over the term
of the licensing

agreement and in the case of the license fee from co-production rights
on the date declared by the licensee.

(iii) Training Revenue :

Training Revenue is recognized over the period of instruction.

No revenue is recognised if there are significant uncertainties
regarding recovery of the consideration due.

g. Foreign Currency Transactions:

Foreign Currency Transactions (FCT) and Forward Exchange Contracts
(FEC) used to hedge FCT (including firm commitments and forecast
transactions) are initially recognized on the spot rate on the date of
the transaction / Contract.

Monetary assets and liabilities relating to FCT and FEC remaining
unsettled at the end of the year are translated at the exchange rate
prevailing as on the date of balance sheet. 1

The difference in translation and realized gains and losses on Foreign
Exchange Transactions (including option Contracts) are recognized in
Profit and Loss Account. Further, in respect of transactions covered by
FEC, the difference between contract rate and spot rate on the date of
the transaction is charged to Profit and Loss Account over the period
of the contract.

h. Employee benefits

i) Post-employment benefit plans

Post employment benefits are recognised as an expense in the Profit and
Loss Account for the year in which the employee has rendered

services.

For defined benefit schemes, the cost of providing benefits is
determined using the Projected Unit Credit Method, with actuarial
valuations being carried out at each balance sheet date. Actuarial
gains and losses are recognised in full in the profit and loss account
for the period in which they occur.

ii) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees is recognised

during the period when the employee renders the service. These benefits
include compensated absences such as paid annual leave.

iii) Long-term employee benefits

Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the

related services are recognized as a liability at the present value of
the defined benefit obligation at the balance sheet date.

i. Public Issue related expenses

Public issue related expenses are recognised as an expense in the
profit and loss account in the year in which the expenses are incurred.

. Taxation

i) Provision for Income Tax is made on the assessable income, at the
applicable tax rates, in accordance with the provisions of the
Income-tax Act, 1961. Income derived from the animation division and
related services are exempt under section IOA of the Income-tax Act,
1961 upto 31 st March 201 I. The Company has provided tax on its other
taxable income earned during the year.

ii) Minimum Alternate Tax (MAT) paid in accordance to the tax laws,
which gives rise to future economic benefits in the form of adjustment
of future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax after
the tax holiday period. Accordingly, MAT is recognized as an asset in
the balance sheet when it is probable that the future economic benefit
associated with it will flow to the Company and the asset can be
measured reliably.

iii) Deferred tax expense or benefit is recognised on timing
differences being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Deferred tax assets and liabilities are
measured using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses,
deferred tax assets are recognised only to the extent that there is
virtual certainty that sufficient taxable income will be available to
realise such assets. In other situations, deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available to realise these
assets.

k. Provision for retakes

Provisions for retakes are recognised wherever they are considered to
be material. Retakes include creative changes to the final product
delivered to the customer, performed on the specific request of the
customer at the Companys own cost. Requests for retakes from customers
are expected to be received by the Company within a period of three
months from the final delivery.

I. Leases

Lease payments for assets taken on Operating Lease are recognized in
the Profit and Loss Account over the lease term in accordance with the

Accounting Standard 19 - Leases.

m. Earnings Per Share

The Company reports basic and diluted Earnings per Share (EPS) in
accordance with Accounting Standard 20 - EPS.

Ã Basic Earnings per Equity Share has been computed by dividing Net
Profit for the year by the weighted average number of Equity Shares
outstanding for the period.

Ã Diluted Earnings per Equity Share has been computed using the
Weighted average number of Equity Shares and dilutive potential Equity
Shares outstanding during the period except where the results are anti
dilutive.

n. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is possible that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
Financial Statements.

o. Impairment

The carrying amounts of the Companys assets, other than inventories
and deferred tax assets, are reviewed at each Balance Sheet aate to
determine whether there is any indication of impairment. If any such
indication exists, the assets recoverable amount is estimated. An
impairment loss is recognized whenever the carrying amount of an asset
or its cash-generating unit exceeds its recoverable amount. Impairment
losses are recognized in the income statement. A cash-generating unit
is the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other
assets or groups of assets. Impairment losses recognized in respect of
cash-generating units are allocated to reduce the carrying amount of
assets in the unit on a pro rata basis.

Mar 31, 2009

A. Basis for Preparation of Financial Statements:

The financial statements have been prepared under the historical cost
convention on an accrual basis of accounting in accor- dance with
Generally Accepted Accounting Principles, Accounting Standards notified
under section 211(3C) of the Companies Act, 1956 and the relevant
provisions thereof.

b. Fixed Assets:

Fixed Assets are valued at cost inclusive of freight, installation
cost, finance cost, duties and taxes and other incidental expens- es
incurred during the construction / installation stage. Fixed Assets
include expenditure incurred on creation of infrastructure facilities
at work premises.

Distribution rights represent the cost incurred on acquisition of
animation contents for exploitation.

Capital work-in-progress comprises outstanding advances paid to acquire
fixed assets and the cost of fixed asset (including expenditure during
construction) that are not yet ready for their intended use before the
Balance Sheet date.

Direct or indirect expenses incurred on the Development of Projects in
order to create Intellectual Property or Content, which are exploited
on any form of media are capitalized as an intangible asset under
development in accordance with AS 26 (intangible assets). In the event,
the project is not scheduled for production within three years, or
project is abandoned, the carrying value of the Development Rights
would be expensed in the year in which such project is discontinued or
abandoned.

c. Depreciation and Amortization:

Depreciation on fixed assets other than leasehold improvements is
provided on straight-line method at rates which are as fol- lows:

Hardware & Software (CGI*) 30.00%

Hardware & Software (Others) 16.21%

Generators 16.21%

Office Equipment 10.00%

Furniture & Fixtures 10.00%

Vehicles 25.00%

*Computer Generated Imagery

Individual assets costing less than Rs.5,000 are fully depreciated in
the year of purchase. Where the aggregate actual cost of individual
items of Plant and Machinery costing Rs.5,000 or less constitutes more
than 10% of the total actual cost of Plant and Machinery, depreciation
is provided at normal rates stated above.

Leasehold improvements are amortized over the primary period of lease.

Cost of Distribution Rights is amortized over the period of the right
including extended period or ten years whichever is lower.

d. Investment:

Long-term investments are stated at cost less provision required, if
any, for the permanent diminution in value thereof.

e. Licensing Rights

In respect of Licensing Rights acquired against a specific sale
contract, the costs are charged off as Production Costs.

f. Revenue Recognition

(i) Production Revenue :

Service revenue from fixed-price contracts is recognized using the
Proportionate Completion Method. Provisions for estimated losses on
uncompleted contracts are made in the year in which such losses are
determined.

ÃUnbilled RevenueÃ represents services provided to the customers till
the Balance Sheet date, which are billed subsequent to year-end. All
such amounts are anticipated to be realized in the following year.

(ii) Distribution Revenue :

Revenue from the licensing of distribution rights (including
withholding tax) is recognized on a straight line basis over the term
of the licensing agreement and in the case of the license fee from
co-production rights on the date declared by the licensee.

(iii) Training Revenue :

Training Revenue is recognized over the period of instruction.

No revenue is recognized if there are significant uncertainties
regarding recovery of the consideration due.

g. Foreign Currency Transactions:

Foreign Currency Transactions (FCT) and Forward Exchange Contracts
(FEC) used to hedge FCT (including firm commitments and forecast
transactions) are initially recognized on the spot rate on the date of
the transaction / Contract.

Monetary assets and liabilities relating to FCT and FEC remaining
unsettled at the end of the year are translated at the exchange rate
prevailing as on the date of Balance Sheet.

The difference in translation and realized gains and losses on Foreign
Exchange Transactions (including Option Contracts) are recognized in
Profit and Loss Account. Further, in respect of transactions covered by
FEC, the difference between contract rate and spot rate on the date of
the transaction is charged to Profit and Loss Account over the period
of the contract.

h. Employee benefits

i) Post-employment benefit plans

Contributions to defined contribution retirement benefit schemes are
recognized as an expense when employees have rendered services
entitling them to contributions.

For defined benefit schemes, the cost of providing benefits is
determined using the Projected Unit Credit Method, with actuarial
valuations being carried out at each Balance Sheet date. Actuarial
gains and losses are recognized in full in the Profit and Loss Account
for the period in which they occur.

ii) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employ- ees is recognized
during the period when the employee renders the service. These benefits
include compensated absences such as paid annual leave.

iii) Long-term employee benefits

Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognized as a liability at the present value of
the defined benefit obligation at the balance sheet date.

i. Taxation

i) Provision for Income Tax is made on the assessable income, at the
applicable tax rates, in accordance with the provisions of the
Income-tax Act, 1961. Income derived from the animation division and
related services are exempt under section 10A of the Income-tax Act,
1961 for a period upto the assessment year beginning 1st April 2010.
The Company has provided tax on its other taxable income earned during
the year.

ii) Minimum Alternate Tax (MAT) paid in accordance to the tax laws,
which gives rise to future economic benefits in the form of adjustment
of future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax after
the tax holiday period. Accordingly, MAT is recognized as an asset in
the Balance Sheet when it is probable that the future economic benefit
associated with it will flow to the Company and the asset can be
measured reliably.

iii) Deferred tax expense or benefit is recognized on timing
differences being the difference between taxable income and account-
ing income that originate in one period and are capable of reversal in
one or more subsequent periods. Deferred tax assets and liabilities are
measured using the tax rates and tax laws that have been enacted or
substantively enacted by the Balance Sheet date.

In the event of unabsorbed depreciation and carry forward of losses,
deferred tax assets are recognized only to the extent that there is
virtual certainty that sufficient taxable income will be available to
realize such assets. In other situations, deferred tax as- sets are
recognized only to the extent that there is reasonable certainty that
sufficient future taxable income will be available to realize these
assets.

j. Provision for retakes

Provisions for retakes are recognized wherever they are considered to
be material. Retakes include creative changes to the final product
delivered to the customer, performed on the specific request of the
customer at the CompanyÃs own cost. Requests for retakes from customers
are expected to be received by the Company within a period of three
months from the final delivery.

k. Leases

Lease payments for assets taken on Operating Lease are recognized in
the Profit and Loss Account over the lease term in accordance with the
Accounting Standard 19 Ã Leases.

l. Earnings Per Share

The Company reports basic and diluted Earnings Per Share (EPS) in
accordance with Accounting Standard 20 Ã EPS.

ÃÂ· Basic Earnings per Equity Share has been computed by dividing Net
Profit for the year by the weighted average number of Equity Shares
outstanding for the period.

ÃÂ· Diluted Earnings per Equity Share has been computed using the
weighted average number of Equity Shares and dilutive potential Equity
Shares outstanding during the period except where the results are anti
dilutive.

m. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obliga- tion as a result of past
events and it is possible that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
Financial Statements.

n. Impairment

The carrying amounts of the CompanyÃs assets, other than inventories
and deferred tax assets, are reviewed at each Balance Sheet date to
determine whether there is any indication of impairment. If any such
indication exists, the as- setÃs recoverable amount is estimated. An
impairment loss is recognized whenever the carrying amount of an asset
or its cash-generating unit exceeds its recoverable amount. Impairment
losses are recognized in the income state- ment. A cash-generating unit
is the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other
assets or groups of assets. Impairment losses recognized in respect of
cash-generating units are allocated to reduce the carrying amount of
assets in the unit on a pro rata basis.